The Whitefish No-Bid Puerto Rico Contract Stinks

A two-person firm connected to Secretary Zinke will charge the government $462 an hour to do electrical work for which it has little relevant experience.

Philadelphia is not just a pleasant city in southeastern Pennsylvania. It is also a state of mind — and not a good one: “corrupt and contented,” Lincoln Steffens called it.

The most Philadelphia thing I ever witnessed in Philadelphia involved an airport contract awarded to a firm called Notlim Services, which was to be paid $1 million a year to provide baggage-handling services as a subcontractor under a contract awarded to another firm. No one had ever heard of Notlim Services, which turned out to have no business address, or business, or employees, or anything else. It occurred to a local reporter that “Notlim” was “Milton” spelled backward, and that the mayor, John Street, had a ne’er-do-well brother named Milton. Surely not — that was too cynical even for corrupt and contented Philadelphia.

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It turned out to be not nearly cynical enough. Of course it was Milton Street behind Notlim, and of course it was even worse than you’d think: The mayor’s brother had not only sold himself as a $1 million-a-year rainmaker to the firm that had won the contract, he had also taken money from other companies with the promise of winning the contract for them. That resulted in the sad and quintessentially Philadelphian episode of a company suing the mayor’s brother in court for in effect taking a bribe and then failing to deliver on what he’d been bribed to do. The city would later come after Milton Street for millions of dollars in unreported business income.

Milton Street was, at the time, by way of occupation, a hotdog vendor. I worked in Philadelphia for the Journal Register Company at the time, and the head of the newspaper division used to rage from time to time when a project wasn’t going as planned: “If we can’t even do this right, we oughta be selling hotdogs!” Journal Register went bankrupt a couple of times and no longer exists; I’m not sure the management team there could have managed a hotdog cart. Hotdog vendors tend to have real business acumen and, if things in his life had gone a little differently, Milton Street might have made a good Goldman Sachs man.

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You’d think that after all that was exposed — the mayor’s brother, no real business, no employees, no actual experience in baggage-handling or anything remotely related to it — that the no-bid contract to Notlim would have been revoked out of pure political self-preservation, if not shame. (Shame in Philadelphia’s city government — imagine!) In fact, it took years of political and legal wrangling to undock Milton Street from the municipal fisc. That’s just how big-city Democrats roll.

What about small-town Republicans?

Meet Whitefish Energy, which has just been awarded a $300 million project to rebuild storm-smacked Puerto Rico’s electrical grid. Whitefish is based in the hometown of Secretary of the Interior Ryan Zinke, who knows the firm’s chief executive and whose son once worked for Whitefish in a modest capacity. Whitefish Energy has two full-time employees, and its largest government contract prior to this was a $1.3 million job fixing 4.8 miles of power line. Its biggest government job other than that was replacing a pole. Whitefish Energy is a two-year-old firm, and it reported $1 million in revenue on its procurement documents.

The firm plans to charge Uncle Stupid more than $300 an hour for a subcontracted lineman and $462 an hour for a subcontracted supervisor. (Subcontractors will make up the bulk of its work force, since — let’s repeat — the firm has two full-time employees.) The company will also charge about $400 per worker in per diem food and housing costs. A former Department of Energy official calls the arrangement “odd.”

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Indeed.

No real work force, no experience in comparable government projects, and a job that is, by itself, about 300 times the firm’s reported revenue — what gives?

No real work force, no experience in comparable government projects, and a job that is, by itself, about 300 times the firm’s reported revenue — what gives? The official explanation is that Whitefish has experience working in the mountains, and Puerto Rico has mountains. There was no formal bidding process.

Well.

There wasn’t anything obviously criminal or illegal about Philadelphia’s awarding a cozy no-bid contract to the mayor’s brother. It very well might have fallen within the letter of the law. But it was wildly corrupt, entirely inappropriate, and precisely the sort of thing that causes people to mistrust their government.

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A $300 million no-bid contract for a two-person firm with connections to a cabinet secretary and no experience in doing work on the scale of rebuilding Puerto Rico?

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